The Government has proposed its latest attempt to bail out failing Conservative run local authorities with an unfair funding formula that will give the majority of a £153 million fund to the South East and South West while continuing to take money away from places like Nottingham with further cuts to its Revenue Support Grant.
Following the Government’s £300 million of extra ‘transition funding’ announced in 2016, which overwhelmingly benefitted more affluent councils in the South, the Government has now proposed ‘negative RSG’ compensation worth £153 million with a rigged criteria which will again see the majority given to local authorities in the South East and South West.
Research has shown that the ‘negative RSG’ funding will see:
- Conservative controlled local authorities receive £131.7 million of which is 86% of the total available funding.
- Labour-led authorities will receive only £3.3m ‘negative RSG’ compensation (2%) after just £14.1m of the transition grant (5%)
Surrey County Council is set to be one of the biggest winners as it will receive £17.3m from the new scheme after previously pocketing £24.1m of transition grant in 2016. It’s outrageous that the Government is once again choosing to bail out councils in better-off areas of the south when poorer councils in the North and Midlands in areas with higher need are losing out.
Increasingly we see Conservative controlled authorities in crisis with their finances despite less cuts to their finances and preferential treatment when it comes to the Government’s funding formula. The list of failing Conservative controlled councils that the Government are trying to bail out includes:
- Northamptonshire County Council went effectively bankrupt, becoming the first local authority in two decades to issue a section 114 notice.
- East Sussex County Council is cutting its services back to the “legal minimum” as a result of financial pressure.
- Surrey County Council’s chief finance officer resigned last month following warnings that the authority ‘does not have sustainable budgets’.
- Lancashire County Council’s finances have been described as being at ‘tipping point’ in a recent report by Grant Thornton auditors.
The Conservative Party is showing themselves both unfair and incompetent when it comes to managing money. Nottingham people and others across the North and Midlands are losing out on millions of pounds of extra funding which would help support the vital council services they rely on. We have written the three Nottingham Members of Parliament and we are working In partnership with the Special Interest of Municipal Authorities to get this issue taken up by the Public Accounts Committee so we can get answers on the Government’s unfair approach to funding.
Cllr Graham Chapman
Portfolio Holder for Finance, Resources and Commercial Services